THE ECONOMIC EFFECTS OF
ENERGY EFFICIENCY MEASURES
Models and results
Dr. Ulrike Lehr
WWW.GWS-OS.COM / © GWS 2016
Münster, Mai 2015
Who we are:
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Privately funded think tank/ research
institute / consultancy
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Currently ~ 24 researchers
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Private and public customers
 International, national and regional
Governments, Ministries
 International, national and regional
Administration
 EC DG-TREN, Climate, Energy
 Energy companies, banks
Research
Question
 2016 GWS mbH
Analysis
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Results
Decision
Banja Luka, September 2016
Contents and goals
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The presentation will:
• Give an overview of the benefits of energy efficiency (costs,
environment, jobs)
• Give examples from the literature: Mediterranean Region
• Give examples from own work: different country studies
and model based estimates: Tunisia, Israel, Russia,
Germany
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Energy Efficiency – Main Effects
WWW.GWS-OS.COM / © GWS 2016
The energy challenge
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Energy drives economic development and people’s well-being
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Inefficient use of energy leads to less competitive economies
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Energy subsidies globally amount to more than 5 trillion dollar, cutting
into governments’ budgets and only supporting the poor to a small
extend
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The EU has set itself a 20% energy savings target by 2020 when
compared to the projected use of energy in 2020 – roughly equivalent to
turning off 400 power stations.
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The COP21 Paris targets are only attainable with more efficiency
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The employment challenge
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Global unemployment rate averages around
6%
Balkan countries have very high
unemployment rates:
 Serbia: almost 19%; coming from 25% in
2012
 Croatia fought with increasing rates up to
17.3% which was slightly decreasing last
year to 16.6%,
 BiH has stabilized at too high a level with
27.6%
 Montenegro seems to stabilize at around
19%.
Youth unemployment is a critical issue
 It hampers economic development
 Threatens social peace
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Definition of efficiency potentials
Technological Potential
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Potential for energy saving with market best products
Economic (no-regret potential)
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Potential for energy saving with products with payback
periods within the lifespan of the product
Much longer payback periods compared to usual
calculations in companies
Technological potential
Payback
period 4 -8
years
Noregret
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Economic benefits along the value chain
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Benefits arise along the value chain of an energy efficiency
measure:
 Installation phase:
 Employment from the thermal insulation of buildings,
- from the production of energy efficient building material,
- from the production of efficient appliances etc.
- from planning and design of efficiency measure
 Operation phase:
 Savings on the energy bill => budget is free for spending on other
purposes
 Maintenance of energy efficiency measures, monitoring etc.
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Overall economy: less imports, better trade balance, less
dependence on exporting countries, increased energy
security
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Case Studies
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From the literature
From own model based estimates
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Case Studies
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From the literature
From own model based estimates
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Energy efficiency in the Mediterranean
MENA region
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Growth of energy demand
exceeds economic growth
National Energy Efficiency
Action Plans have been
established in:
 Tunisia, Sudan, Libya;
Egypt, Lebanon,
Palestine, Jordan and
Algeria.
Economic and job creation
potential
► Lebanon: 15,000
► Egypt, Morocco more than
100,000
► Tunisia 15-20,000
► Largest effects in the
building sector
► Additional benefits from
healthier environment
Source: Energy Efficiency and Employment: a win-win opportunity; In the
Southern Mediterranean. EU and MED-ENEC Project: Energy Efficiency in the
Construction Sector in the Mediterranean.
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Local production – local growth
Energy efficiency, esp.
construction is domestic.
► Leads to domestic jobs
► Long-term development is
supported:
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 E.g. Algeria: phases out
lightbulbs by 2020
 Supports local production
of energy efficient bulbs
 Local knowledge
enhanced
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The EU case – Legislation and Impacts
The Energy Efficiency Directive (2012): all sectors; comprehensive energy
efficiency action plan,
 to prioritize energy efficient procurement,
 to renovate central government property and for energy suppliers to achieve
required energy savings of 1.5% a year.
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Earlier, the Energy Performance in Buildings Directive (2002): the 2010 recast
nearly zero-energy challenge for new buildings
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Ecodesign Directive (2005)
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Energy Labelling Directive (1994)
Expected economic impacts
 at least 280,000 to 500,000 new jobs in the EU by 2020.
 The jobs are anticipated to be heavily concentrated in the buildings and
construction sectors, with the Energy Performance
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Buildings Directive (EPBD) the key policy driver.
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Also in energy services, certification, auditing
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and inspection of heating and air-conditioning systems.
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Case Studies
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From own model based estimates
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Case Studies
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From the literature
From own model based estimates
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Different models developed by GWS –
tailor-made to different countries
FULL
economic
model
Complete picture of
production, consumption,
imports and exports,
driven by GDP
development in the future.
 2016 GWS mbH
Complete picture of the
economy, energy
balances, prices,
behavioral equations
InputOutput
Tables plus
Macro
drivers
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Full economic models – PANTA RHEI
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COUNTRY: Germany
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Macroeconomic energy
and environmental model
Suitable for simulation of
direct and indirect effects
• Esp. counterbalancing
effects
• Results are net after
all adaption processes
Reference:
Socio-economic and
economic-environmental
relations of the past will
continue in the future
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Macroeconomic results
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Higher GDP and more jobs (+127.000 in 2030)
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•
•
•
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Additional investment yields additional production and
therefore additional employment,
Energy is replaced by capital,
Imports (e.g. crude oil, gas) are replaced by domestic value
added,
Construction, trade and services are more labor intensive
than the energy industry (industry structure matters),
Energy efficiency improves economic productivity and thus
competitiveness on fast growing markets,
Rebound effects are small
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Direct and indirect effects of energy efficiency
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COUNTRY: Tunisia
Developed on behalf of GIZ and the Tunisian Energy Agency
 Economic effects of the Tunisian Solar Plan
 Combination of energy efficiency (EE) measures with
renewable energy (RE) measures.
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COUNTRY: Israel
Developed on behalf of MED-ENEC, Energy Efficiency in the
Construction Sector in the Mediterranean, ENPI/2009/224969 and the Ministry of Energy and Water Resources in Israel
 Economic effects of the National Energy Efficiency Plan
 Investment in buildings, industry, cross sectional and
agriculture
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Results
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Germany
 Investment of 300 billion
(2030), buildings,
equipment, vehicles
 150-200,000 jobs
 +1% in GDP
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Israel
 Annual investment in measures
to increase the efficient use of
electricity in households, public
administration, buildings,
industry, trade, agriculture and
the water sector on average
amounts to 1.4 billion NIS.
 More than 5,000 new jobs
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Russia
Replacement of inefficient machinery and
equipment, improvement of house
insulation,
Need investment of 10,500 Bln Ruble
(corresponds to 10% of total Russian
investment)
Firstly, positive impact on economic growth
Building sector is positively affected
Employment increases
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Tunisia
The Solar Plan creates 6,000 additional jobs,
from roughly 1 billion Tunisian Dinar
(around 400 million Euro) investment.
The Tunisian labor productivity is much
lower than labor productivity in Israel,
therefore employment effects from roughly
the same amount (1.4 billion NIS convert
into roughly 300 million Euro) are relatively
low.
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Conclusions
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Energy efficiency targets the construction sector in most
countries analyzed
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Additional employment due to additional investment
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Overall economic effects are positive
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Payback through the electricity bill
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Detailed analysis necessary, because countries differ with
regard to labor intensity, industrial integration and energy
costs
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CONTACT PERSON
Thank you for your attention.
Ulrike Lehr
T +49 (0) 40933 - 280
E lehr@ gws-os.com
Head of Energy and Climate division
Confidentiality of Information
The content of this document is strictly confidential and must not be circulated or used without permission of GWS.
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